Fans streaming in their millions to e-sports

Of nation’s more than 400 million online gamers, 56pc are now estimated to be are watching e-sports competitions

PUBLISHED : Tuesday, 16 August, 2016, 4:52pm
UPDATED : Monday, 19 June, 2017, 12:34pm

Douyu TV, a Chinese start-up similar to Amazon’s live video-game streaming service Twitch , announced a Series C round of funding worth 1.5 billion yuan on Monday, marking the latest high-profile financing deal within an online games industry which continues to boom in China.

The fact the backing was led by social giant Tencent Holdings, the parent of mainland China’s most popular mobile chatting tool WeChat, also illustrates not only the level of investor which is now piling into the market, but just how important the Chinese tech giant views the burgeoning so-called e-sports sector.

Founded in 2011, Twitch, formerly known as, allows users to watch other people play video games. Amazon bought the streaming service for US $970m in 2014.

Douyu’s valuation hit US$ 1 billion in March after its Series B round worth US$100 million, again led by Tencent. Sequoia Capital China and Nanshan Capita have participated in its previous financing.

The startup, which is based in Wuhan in Hubei province where it employs 800 staff, already has around 100 million registered users and 15 million daily active users across its platform, according to the data released by the company in March.

Tencent’s levels of investment are certainly high, but they are not exceptional for the growing e-sports industry.

Short for electronic sports, e-sports is the umbrella term for organised, competitive gaming events which can be played before live audiences and broadcast over the internet.

Some games include digital versions of real life sports, such as football simulator FIFA, but most of the top titles are first-person shooters or multiplayer fantasy games.

Most spectators watch from home, but e-sports competitions can attract tens of thousands of people to stadiums across the world. One recent League of Legends Championship, brought in 40,000 spectators to Seoul’s World Cup Stadium.

China has now overtaken the US as the world’s biggest e-sports market, with 170 million users, generating around 27 billion yuan in revenue last year, and that’s now expected to grow to more than 30 billion yuan this year, according to Beijing-based internet consulting firm iResearch.

There are currently more than 400 million online gamers in China, spending a combined 114 billion yuan (US$17.6 billion) last year, according to local media, and around 56 per cent of those are watching e-sports competitions.

On Saturday night, a Chinese professional e-sports team, Wings Gaming, won The International 2016 – a Dota 2 tournament held in Seattle, one of the biggest e-sports events of the year.

The five-member team, at an average age of less than 20 years old, took a staggering US$ 9.1 million in prize money from an overall prize pot valued at more than US$20 million, officially the biggest in e-sports history.

Wings Gaming’s members are generally aged between 18 and 24, and its star players are becoming among China’s most popular sports stars among youngsters after the Chinese beat North American team DC three games to one.

We are seeing increasing numbers of Chinese young online game players, attracted by Wings’ success, wanting to become professional e-sports players
Neo Zheng, research manager at IDC China

The team was set up in September 2014, sponsored by Chongqing firm, Youth Tech Ltd.

“We are seeing increasing numbers of Chinese young online game players, attracted by Wings’ success, wanting to become professional e-sports players.” said Neo Zheng, research manager of IDC China’s Client System Research.

The mainland mania for the fast-growing live streaming industry will continue to boost the country’s e-sports market as more users watch e-sport competitions through the live-streaming sites , he said, meaning many more developers are going to be on the hunt for investment money.

The great news for those companies, however, is that earlier funding deals show there is a strong appetite to back them.

Money has been pouring into e-sports streaming services, with all of the country’s internet giants investing heavily in both live video-game-streaming sites and e-sports gaming teams.

In July, for instance, Yingxiong Entertainment, a mobile games company dedicated to the promotion of e-sports, landed 640 million yuan in Round A financing from several domestic investors.

In May, LeSports announced is was to sponsor the China-based e-sports event World Cyber Arena, from which Le Sports will establish its own e-sports commercial system.

And the month before Alibaba, which owns the South China Morning Post, signed an agreement with Singapore-based social networking firm YuuZoo to run the firm’s e-sports events in China, including the AliSports World Electronic Sport Games kicking off at the end of April, which will offer a total of US$5.5 million in prize money.

Last year, Wang Sicong, chairman of private investment firm Prometheus Capital and the son of one of China’s wealthiest men, Wanda Group founder Wang Jianlin, also launched its own Twitch-like service called Panda TV, with registered capital of 20 million yuan.

By next year, research firm Newzoo expects the global professional e-sports market to be worth more than US$465 million, and experts now suggest an increasing share of that will be generated from China.